How to Start up Your Own Tech Startup

It's All About the Business Plan

Sure, you have to have a vision. But before too long, you'd better answer this question: "Am I addressing a problem that has a solution people will pay for?" says Newt Hamlin, a longtime tech executive, angel investor, and managing partner of LGE, a management consultancy. If you can't answer that, investors' money will not be forthcoming, he says.

Mehta's first venture focused on computer animation but failed, largely because he had no idea who the customers might be. "You absolutely must understand the target market. If you don't, it doesn't matter how great the technology is," he says.

Bohac's CallCopy nearly foundered, not because it didn't have a customer, but because its business plan was murky. Fortunately, he says, one of the VCs who refused to provide funding introduced him to TechColumbus, a regional incubator for high-tech startups, and it provided the advice he needed.

Asking for help is not a sign of weakness. Indeed, an instant turnoff to an investor is a would-be CEO who won't take advice, says LGE's Hamlin. "No one says that, but the attitude shows," he adds.

And once you have a good business plan, don't be afraid to change it when the market demands it. Mehta's 4th Pass, for example, started out selling a compiler that made it very difficult to reverse-engineer code. It worked, and the company made money, but the CEO realized that the market was limited. 4th Pass shifted gears and moved on to the mobile telephony software that ultimately led to the buyout by Motorola. Likewise, InfoGlide began with a search engine tuned to identify serial killers but morphed into a success when it developed an engine used for fraud detection and comparison shopping, says Jay Valentine, the company's former CEO.

Finally, network, network, network. That's true when you're looking for a partner, a VC, or an advisor. And while LinkedIn and other social networking sites are useful, nothing replaces face-to-face contact. "Do everything you can to get a warm introduction to a VC. I've never cold-called one during the startup process," says Mike Cohn, CEO and founder of Cloud Sherpas, a newly formed cloud computing systems integrator.

And don't be intimated. Others have succeeded, you can too, says Hamlin. "If you have the right solution, and you don't have a big mortgage or teenagers to send to college, it can be really exciting. Do it," he says.